stock options

[signal15]

In Minnesota or california, would a company benefit if an employee was terminated before they became fully vested in their stock options? If so, how? Would make something on the books look better to shareholders?

 

[ALawyer]

While a company derives some benefit if an employee is unable to exercise options that are "in the money" -- such as an option price of $5 and market price of $100 -- as it theoretically could sell the same new shares and get $95 more for them, unless you are talking about LARGE numbers of options it likely would have little impact on the financial statements or perceived value of the company as such.

Absent an employment agreement Companies essentially have the right to fire at will, for other than prohibited forms of discrimination -- age, sex, race, etc. -- and option holders, as such are not in a protected class.

 

[signal15]

So is it not something to be suspicious of if 5 different *good* employees were terminated without just cause, about a month before each of them became fully vested in their stock options?

The options are currently underwater, but it does seem strange that 5 different people were fired 2 years and 11 months after each of them started, and none of them had any performance problems or other issues. I know right now the company is pushing to be cash flow positive, and they did it last quarter, but only by a few thousand dollars, off several million in revenue.